Cigarette smoking is the single greatest cause of preventable deaths. In the VA health care system, patients with chronic medical illnesses represent an important population on which to focus smoking cessation efforts. Smoking cessation among patients with chronic medical illnesses can substantially decrease morbidity and mortality. Despite these benefits, many patients with chronic medical illnesses continue to smoke. There is a strong interrelationship between depression and chronic medical illness. Depression can derail sustained smoking cessation and may be an important barrier to smoking cessation for Veterans with chronic medical illness. Despite the barriers they face, smokers with depression are motivated to quit smoking. Smokers with histories of depression may respond better to smoking cessation interventions that are augmented with mood- management adjuncts such as mood-management counseling. Thus, depressed smokers are more likely to quit when behavioral mood-management is added to traditional cessation approaches. Yet, the augmentation of smoking cessation with behavioral mood management is not yet firmly established. Also these intensive interventions have limited reach when conducted in person. Telephone counseling can deliver intensive and effective treatment to people who smoke, yet its implementation has been limited among smoker with depression. There is a need to develop novel proactive telephone-delivered approaches that can broadly deliver intensive smoking cessation interventions to Veterans who may not respond to standard care, such as those with chronic medical illnesses and depressive symptoms. The specific aims of the study are to 1) evaluate the impact of a telephone-delivered smoking cessation intervention augmented with behavioral mood management on rates of prolonged and point prevalence abstinence from cigarettes among Veterans with chronic medical illnesses and depression; 2) monitor the impact of behavioral mood management intervention on depressive symptoms; 3) if effective, assess whether change in self-efficacy, positive and negative affect, and motivation to quit mediate the impact of behavioral mood management intervention on smoking cessation among Veterans; and 4) assess the cost-effectiveness if the mood-enhanced intervention. Proposed is a randomized comparative effectiveness trial with a two-group design in which 350 Veteran smokers with depression and chronic medical illness will be randomized to either: 1) smoking cessation plus adjunctive behavioral mood management (SMK-MM group), an intervention that includes a proactive tele- health intervention that combines evidence-based smoking cessation counseling augmented with behavioral mood management and a tele-medicine clinic for accessing nicotine replacement therapy (NRT), or 2) smoking cessation telephone counseling control (SMK CONTROL), a contact-equivalent control that provides the same smoking cessation telephone counseling intervention augmented with health education (instead of mood management) and a tele-medicine clinic for accessing NRT. Patients with chronic medical illnesses will be identified from patient intake systems of the Durham Veteran's Affairs Hospital and screened for tobacco use and depressive symptoms. The main outcome in this trial is prolonged abstinence at 6-month and 12-month follow-up. Logistic regression will be used to test for a between-group difference in the proportion of patients with self-reported prolonged abstinence from cigarettes at 6 months. A general linear mixed model will be used to estimate changes depressive symptoms between groups. If there is a significant intervention effect on smoking cessation, meditational analysis will be conducted to examine whether changes in self-efficacy, affect, and motivation to quit mediate the impact of the mood management intervention.